Sarawak-based oil and gas, integrated support services provider, Ocean Vantage Holdings Berhad , has just concluded the first-ever fully digital prospectus launch in Malaysia today. The digital launch event was held in conjunction with the Group’s upcoming listing on the ACE Market of Bursa Malaysia Securities Berhad.
Managing Director of Ocean Vantage, Kenny Ronald Ngalin said, “The oil and gas industry outlook remains promising for outsourced support services providers such like Ocean Vantage, as major industry players are increasingly consolidating their operations and workforce, preferring to outsource functions to external service providers. Additionally, we are expanding our market presence in the downstream segment to further capitalize on the opportunities arising from development activities in the onshore areas along the Sarawak Corridor of Renewable Energy (“SCORE”).”
“At Ocean Vantage, we have deliberately chosen to adopt an asset-light strategy from day one for its flexibility, agility and scalability, which is rather uncommon in an industry where it is usually capital-intensive. This strategy has also helped us maneuver through the oil price cycle. Whether oil price is USD100 or USD40 per barrel, our business is intact. Our agile and adaptive business model has proven its resilience over the years as reflected in the growth of our operations and financial performance,” Mr. Kenny Ronald Ngalin further commented.
For perspective, the Group’s revenue grew from RM17.6 million in the financial year ended Dec 31, 2016 (“FY2016”) to RM58.3 million in FY2019, representing a 3-year CAGR of 48.9 percent. Profit after tax rose from RM2.7 million to RM6.9 million during the same period, reflecting a 3-year CAGR of 36.7 percent.
Another positive industry development, he added, is the rising number of active rigs in recent years as it signifies the potential increase in demand for offshore oilfield services.
According to the Independent Market Researcher, Providence Strategic Partners Sdn. Bhd., the number of active rigs globally has been on an uptake, increasing from an average of 1,593 rigs in 2016 to an average of 2,177 rigs in 2019, at a compound annual growth rate (“CAGR”) of 11.0 percent.
A similar trend was witnessed in the number of active rigs in Malaysia, where there was an uptake between 2016 and 2018 from an average of 4 rigs to an average of 7 rigs, recording a CAGR of 32.3 percent. In December 2019, the number of active rigs in Malaysia stood at 12 rigs.
From the IPO exercise, Ocean Vantage will be raising approximately RM21.4 million from its public issue, of which RM3.2 million or 15.1 percent of total proceeds will be used to broaden its range of support services for the upstream O&G industry to include underwater diving services as well as advance non-destructive testing and inspection services.
Meanwhile, RM8.6 million (40.2 percent) will be used as capital expenditure to strengthen its project management capabilities in the downstream O&G segment, RM6.6 million (30.7 percent) for working capital, with the balance RM3.0 million (14.0 percent) earmarked for listing expenses.
Ocean Vantage’s IPO exercise entails a public issue of 82.2 million new shares,representing 20 percent of its enlarged share capital, together with an offer for sale of 41.1 million existing shares in the following manner: –
- Public issue of 82.2 million new shares:-
- 20.6 million new shares available for the Malaysian public;
- 4.1 million new shares available for eligible Directors, employees and persons who have contributed to the success of the Group; and
- 57.5 million new shares by way of private placement to identified investors;
- Offer for sale of 41.1 million existing shares by way of private placement to identified investors.
Pursuant to the launch of Ocean Vantage’s prospectus, applications for the Public Issue are open today and will close on July 9 at 5.00 p.m. Ocean Vantage is scheduled to be listed on the ACE Market of Bursa Securities on July 22.
Upon listing, Ocean Vantage will have a market capitalisation of RM106.9 million based on the issue price of RM0.26 and its enlarged share capital of 411.0 million shares.
M&A Securities is the Principal Adviser, sponsor, underwriter and placement agent for the IPO exercise.